FOR IMMEDIATE RELEASE

Aiming to take back market share from competitors

Tokyo, January 17, 2005 --- Japan Tobacco Inc. (JT) (TSE:2914) announced today that it will launch six new cigarette brands - "Seven Stars Revo Lights Menthol Box," "Frontier Neo Box," "Lucia Citrus Fresh Menthol One," "Mild Seven Super Lights Eco Style," "Rin" and "Sakura" - on February 1, 2005, in conjunction with the sales area expansion of "Caster Cool Vanilla Menthol Box," "Peace Aroma Menthol Box," "Mild Seven Prime Lights Box," "Alphabet H Side Slide Box," "Alphabet R Side Slide Box" and "Alphabet C Side Slide Box," which have been going through the test-marketing process since July 2004. With the six products announced today, the number of new products introduced in the fiscal year ending March 31, 2005, amounts to 18; the highest number of products launched, per year, in the company's history.

In its latest medium-term management plan, JT PLAN-V, JT stated that the company will, as part of its top-line growth strategies, aggressively launch new products and enhance marketing activities in growing segments such as the "premium" segment (JPY 300 and more per pack), the 1-miligram tar segment, and the menthol segment, and the creation of a new and innovative category for "D-spec" reduced odor cigarettes.

"With the launch of these six new products, we can establish a solid foundation for the challenge to win back market share in the domestic market," said Yasumasa Matsunaga, JT executive vice president, who heads the Product Group of JT's Tobacco Business. "And with this ongoing new product strategy in the domestic market, the long-term market share decline may bottom out. In the end we will further accelerate the taking back of our market share from competitors with this strategy."

Among the six new products being introduced, five products fall into the "premium" segment, two of which fall under the "1-milligram tar" segment, two in the "menthol" segment and three products, "Seven Stars Revo Lights Menthol Box," "Frontier Neo Box" and "Lucia Citrus Fresh Menthol One" are "D-spec" products. "Seven Stars Revo Lights Menthol Box" and "Frontier Neo Box" use special flavors which have similar effects to the citrus flavor used in D-spec. One product, "Mild Seven Super Lights Eco Style" uses new ecologically friendly packaging, consisting of only paper, a renewable environmental resource, rather than using film or aluminum foil. "Rin" is the highest grade and priced product in the JT portfolio, using 100 percent domestic tobacco leaves. The new product "Sakura" was developed under the management of President and CEO Katsuhiko Honda, acting as brand manager.

Each of the new brands announced today will be sold in prefectures that differ from product to product. In this market entry phase, each product will be assessed, and if successful, its sales area will be expanded further regionally or nationwide.

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Japan Tobacco Inc. is the world's third largest international manufacturer of tobacco products. The company manufactures internationally recognized cigarette brands including Camel, Winston, Mild Seven and Salem. Since its privatization in 1985, JT has actively diversified its operations into pharmaceuticals and foods. The company's net sales were JPY 4.625 trillion in the fiscal year ended March 31, 2004.